Do you need life insurance if you’ve not got kids?
When you consider whether or not you need life insurance, we’ll bet that many search-engine results supply information on how this will provide for your kids when you’re not around. For parents, life insurance is a no-brainer, since it’s peace of mind that should anything happen to them unexpectedly, their children will be provided for.
But, not all of us have children or dependents, or plan to have them in the future. So, does this mean that life insurance isn’t necessary? Let’s find out.
What is life insurance?
First of all, let’s explore what life insurance means. Life insurance is a policy that provides those around you with financial support when you’re not around. This involves setting up a plan with an insurance company, who will typically pay out a cash sum to the beneficiaries who you have specified, known as the death benefit. If you have long-term financial commitments, such as a mortgage, rent or a loan for example, this payment can help your loved ones to cover the costs. Some companies also offer a kind of bequest, or legacy feature, such as a charity or good cause donation and these are getting more popular, as IE mag covered in the past.
With a life insurance plan, it is up to you how much cover you choose to take out and this is usually based upon the risk level of your day-to-day life. You can also choose how long you wish to take the plan out for.
There are two popular options:
- Universal life insurance — which lasts your whole life
- Term life insurance — which typically spans between 10 and 30 years.
There are a variety of plans to choose from, depending on your circumstance, and you could find out more about this using online resources such as the Insurance Bulletin, for example.
Do I need life insurance?
Although life insurance can be beneficial for those who have children, you could still benefit from taking out a plan. So, you should ask yourself these questions:
- Could you support yourself without your spouse’s income?
If you’re in a relationship and combine your incomes in order to afford your living costs, you need to ask yourself — could I support myself financially if my spouse were to pass away unexpectedly? Of course, it’s not something we want to think about, but life insurance could replace this loss of income and help you to get yourself back on track.
And vice versa, of course. If you weren’t around, could your partner afford your rent or mortgage? These are factors that you need to take into consideration, since life insurance could be extremely beneficial if you and your spouse rely on one another’s incomes to live.
- How much debt do you have?
If you have a loan that periodically comes out of your bank account, have you considered who the responsibility of these payments would fall upon if you weren’t around? Some debts have termination clauses, which eradicates any outstanding balances when you die, but this is rare.
The majority of debts will have to be paid by those who you have chosen to inherit your estate. If you do not take out life insurance, your loved ones will be responsible for your financial burdens. On the other hand, if you choose to open a life insurance plan, these debts will be covered by your provider.
If you rely on your spouse’s income and/or have any debt, then it’s likely you need life insurance. Plus, if you’re a young person and are in good health, life insurance can be extremely affordable. And if you want that added peace of mind, you should consider opening up a policy.
Of course, we don’t know for certain what the future may hold and what obligations may end up falling into our laps, so it’s always good to have a back-up plan and ensure you’re covered with life insurance.